Opening a checking account is a big step for a teenager. Yes, it's a great way for your teen to become more independent, but it's also a lot of responsibility. Ideally, you should open a checking account for your teen at an early age to teach him or her how to handle money. However, before you go to the bank, you need to make sure your teen is ready to have a checking account.
How Old Is Your Teen?
While there isn't a specific age that dictates your teen should have a checking account, many banks allow teens to have checking accounts once they are 13 years old. However, this doesn't mean that your child should have a checking account as soon as he or she turns 13. Remember, until your child turns 18, you're responsible for the use of the account. This means, if your child overdraws that account, you need to make sure the money is repaid.
Is Your Teen Responsible?
Your teen's level of maturity and level of responsibility should be a huge factor in whether or not you allow your teen to open a checking account. A few questions that you should ask yourself before opening a checking account with your teen, include:
What Is Your Teen's Financial Status?
If your teen has a part-time job, it's probably a good idea to set up a checking account so that his or her pay can be directly deposited into the account. Of course, you could use a savings account, but if your teen is old enough to get a job and responsible enough to work hard, it's time that your teen learns how to manage a checking account.
If your teen isn't old enough to get a job, you need to consider other sources of income. Opening a checking account at a young age, is a great learning experience and it helps your child avoid financial pitfalls later in life. So, if you feel that your teen is responsible enough to learn how to manage a checking account, you could use the account to manage your child's allowance or money that's made by doing chores for neighbors or babysitting.
Ultimately, teaching your teen about money management before he or she goes off to college or moves out of your home is extremely important. So, if you think that your teen is responsible enough for a checking account, chances are, it's a good time to open one. For more information, talk to a professional like Cheviot Savings Bank.
A few years ago, I found myself in a tough spot. I was completely out of money, and my expenses kept piling up. I knew that if I didn't turn things around, I would be declaring bankruptcy for my business. To ward off financial disaster, I decided to invest a little time into learning how to budget. I made a few simple changes, including eating out less, paying attention to fines and fees, and avoiding excessive shopping trips. You wouldn't believe how quickly things changed. This blog is designed to teach beginners how to shape their financial future, so that you don't have to worry.